UNCONDITIONAL AND CONTINUING GUARANTY
Exhibit
10.20
WHEREAS,
the undersigned Xxxx X. Xxxx
(the "Guarantor") seeks to induce APA Enterprises, a Minnesota corporation
("APA"), to extend or continue to extend credit to Photonics International,
Inc., a Minnesota corporation (the "Borrower") by acceptance of Borrower's
promissory note of even date herewith (the "Note") in payment of the purchase
price under that certain Stock Purchase Agreement of even date herewith whereby
Borrower will acquire all of APA's interest in APA Optronics (India) Private
Limited;
WHEREAS,
the execution and delivery by
Guarantor of this Guaranty is a condition precedent to acceptance of the Note
by
APA; and
WHEREAS,
Guarantor will derive
substantial benefits from the credit extended or continued to and/or obligations
purchased or acquired of Borrower;
NOW
THEREFORE, in consideration of the
premises and other good and valuable consideration, the receipt of which is
hereby acknowledged, Guarantor hereby represents and agrees as
follows:
1.
Guaranty.
Guarantor hereby
absolutely, irrevocably and unconditionally guarantees to APA the punctual
and
full payment when due, whether at the stated date or dates for such payment,
by
acceleration or otherwise, of all indebtedness, liabilities and obligations
of
Borrower to APA of every name and nature whatsoever, whether absolute or
contingent, now existing or hereafter arising, secured or unsecured, created
directly or acquired indirectly by assignment or otherwise and whether on open
account, or evidenced by a promissory note, check, draft, continuing credit
agreement, continuing agreement for letters of credit, continuing agreement
for
bankers' acceptances or any other instrument or document, and whether created
as
maker, debtor, surety, endorser, guarantor, pledgor, account party or otherwise,
and including, without limitation, all principal, interest, premiums, fees,
costs and expenses reimbursements, letter of credit reimbursement obligations,
acceptance fees and commissions and all other obligations assumed under the
documentation of such indebtedness, liabilities and obligations, all of which
are referred to herein as the "Obligations."
2.
Payment
by
Guarantor. In the event of a default by any Borrower under any of
the Obligations and/or the failure of a Borrower punctually to pay any of the
Obligations when due, Guarantor hereby agrees to make such payment punctually
when and as the same shall become due and payable, whether at maturity, by
acceleration or otherwise. Each such payment shall be made at the
address of APA set forth in Section 12(A), below (or at such other office as
APA
shall specify by written notice to Guarantor), in immediately available
funds.
While
this Guaranty is in effect, all
property of Guarantor in the hands of APA is hereby and shall continue to be
and
stand pledged and impressed with a lien as collateral security for all
Obligations.
3.
Obligations
of Guarantor
Unconditional. Guarantor hereby agrees that:
(A)
Guarantor's liability hereunder is
unconditional, irrespective of:
(1) the
legality, validity or enforceability of the Obligations;
(2) the
legality, validity or enforceability of any security interest, mortgage or
pledge granted by Borrower as collateral for the Obligations, any guaranty,
suretyship, letter of credit or reimbursement agreement issued by any person
secondarily or otherwise liable for any of the Obligations, any security
interest, mortgage, or pledge granted by any person secondarily or otherwise
liable for any of the Obligations, any right of set-off against any account
or
credit on APA's books in favor of Borrower or any other person secondarily
or
otherwise liable for any of the Obligations, or any other device providing
collateral security for payment of the Obligations, all of the hereinabove
referenced devices being referred to herein as the "Collateral
Security";
(3) the
absence of any action or effort by APA to either resort to, enforce or exhaust
its remedies under or against the Obligations and/or the Collateral
Security;
(4) the
waiver or consent by APA with respect to any provision in the documentation
of
the Obligations or the Collateral Security; and
(5) the
recovery of any judgment against Borrower or any action to enforce such judgment
or any other circumstance which might, absent the unconditional nature of this
Guaranty, constitute a legal or equitable discharge or defense of a
Guarantor.
(B)
APA may at any time, or from time
to time, in APA's sole discretion:
(1) change,
alter, renew, continue, extend and/or accelerate the time of payment of, all
or
any of the Obligations, or any part or parts thereof or any renewal or renewals
thereof;
(2) replace
any existing Obligation and the documentation therefor with an amended and
restated Obligation and the documentation therefor;
(3) sell,
exchange, release, compromise and/or surrender all or any of the property which
is the subject of the Collateral Security, or any part or parts thereof, with
respect to which APA may now or hereafter have an interest (the
"Collateral");
(4) sell
and/or purchase any or all of the Collateral at public or private sale, or
at
any broker's board, and after deducting all costs and expenses of every kind
for
collection, sale and/or delivery, apply the proceeds of any such sale or sales
against any of the Obligations; and
(5) settle
or compromise any or all of the Obligations with Borrower, and/or any other
person or persons liable thereon, and/or subordinate the payment of same or
any
part thereof to the payment of any other debts or claims which may at any time
be due or owing to APA and/or other person, all in such manner and upon such
terms as APA may see fit and without notice to or the consent from Guarantor,
who hereby agrees to be and remain bound upon this Guaranty, irrespective of
the
effect upon the existence or status of the Obligations or the Collateral
Security and notwithstanding any such change, alteration, renewal, continuance,
extension, acceleration, sale, exchange, release, compromise, surrender,
application, settlement, subordination or other action hereinabove
mentioned.
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(C)
The
liability of Guarantor will not be discharged except by complete and final
performance of the Obligations.
(D)
The
liability of Guarantor under this Guaranty shall be reinstated with respect
to
any amount paid to APA by Borrower or any other guarantor of the Obligations
which is hereafter required to be returned to Borrower or such other guarantor
or any trustee, receiver or other representative of or for Borrower or such
other guarantor, upon or by reason of the bankruptcy, insolvency,
reorganization, or dissolution of Borrower or such other guarantor, or for
any
other reason, all as though such amount had never been paid to APA.
(E)
This is a guaranty of payment and
not merely of collection.
4.
No
Subrogation. No
payment by Guarantor pursuant to any provision of this Guaranty or other
satisfaction of Guarantor's liabilities hereunder shall entitle Guarantor,
by
subrogation to the rights of APA or otherwise, to any payment from Borrower,
from the proceeds of the property of Borrower or from any Collateral
Security.
5.
Waivers. Guarantor
hereby expressly waives:
(A) notice
of the acceptance of this Guaranty;
(B) notice
of extensions of credit by APA to Borrower and of any change in the rate at
which any of the Obligations are accruing interest;
(C) diligence,
presentment and demand for payment of any of the Obligations;
(D) protest,
notice of protest, notice of dishonor and notice of nonpayment or default to
Guarantor or to any other person with respect to the Obligations;
(E) filings
of claims or proofs of claim with a court in the event of any bankruptcy or
insolvency proceedings as to which Borrower or any person secondarily or
otherwise liable for any of the Obligations is subject;
(F) any
right to require a proceeding first against Borrower or any other
person;
(G) any
demand for payment under this Guaranty;
(H) any
defenses available to a surety under law; and
(I)
all other
legally waivable notices to which Guarantor might otherwise be
entitled.
6.
Insolvency
of
Borrower. If a Borrower becomes subject of an order for relief
under the Federal Bankruptcy Code, as now or hereafter in effect, or any
proceeding is commenced by or against Borrower under any insolvency or other
debtor relief laws, as now or hereafter in effect, or for the appointment of
a
receiver for Borrower or any of its property, or if Borrower shall make an
assignment for the benefit of creditors or shall discontinue business or become
unable to pay or admit in writing its inability to pay its debts as they come
due, all Obligations of Borrower shall, for the purpose of this Guaranty, become
immediately due and payable.
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7.
Covenants
and Financial
Condition. Guarantor covenants and agrees with APA that during such time as
this Guaranty is in effect, there will be no material adverse change in
Guarantor's financial status, Guarantor will perform and comply with all of
its
duties, responsibilities and obligations articulated in the terms, provisions
and agreements contained in this Guaranty, and Guarantor will not sell,
mortgage, pledge or otherwise convey or transfer any substantial or material
portion of its real or personal property without having first obtained APA's
written consent therefor. In the event of any breach of said
covenants and agreements, each of the Obligations, regardless of its terms,
shall, at APA's election, be deemed for the purposes of this Guaranty to have
matured, and at APA's election, Guarantor shall promptly pay to APA all of
said
outstanding Obligations and Lender may take any action it deems necessary or
advisable to enforce this Guaranty.
8.
Subordination.
Assignment and
Transfer. Guarantor further agrees with APA:
(A) that
all of the present and future indebtedness of Borrower to Guarantor shall be
and
hereby is subordinated to, assigned and transferred to APA and pledged and
made
security for the payment of all Obligations;
(B) that
Guarantor contemporaneously herewith and from time to time hereafter shall
on
request execute such further endorsements, assignments or other proper transfers
as APA may request further to evidence the assignment hereby agreed to and
made;
and
(C) that
Guarantor hereby appoints APA and each of its executive officers as Guarantor's
attorney in its or their name to demand and enforce payment of said
indebtedness, to prove all claims, receive all dividends and take all other
action on said indebtedness in any liquidation or any proceedings whatsoever
affecting Borrower or its property under any bankruptcy or other laws now or
hereafter in effect for the relief of debtors and in general to do any act
or
take any action in regard to said indebtedness which Guarantor might otherwise
do.
9.
Termination
of
Guaranty. This Guaranty is a continuing Guaranty and shall remain
in full force and effect irrespective of any interruptions in the business
relations of Borrower with APA; provided, however, that Guarantor may, by notice
in writing actually received and acknowledged by an executive officer of APA,
terminate this Guaranty with respect to all new Obligations incurred or
contracted by Borrower or acquired by APA at noon on the sixtieth day after
the
date on which such notice is so received and acknowledged, but this Guaranty
shall remain in full force and effect as to all Obligations existing at the
sixtieth day after receipt and acknowledgment of such notice and as to all
renewals and extensions thereof until the full payment and satisfaction thereof
and the expiration of any and all applicable preference periods during which
the
payments credited to the satisfaction of the Obligations may be required to
be
returned to the payor thereof or such person's trustee, receiver or other
representative.
10.
Representations
and
Warranties. See Exhibit A, if any, attached hereto for a list of
Representations and Warranties. None.
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11.
Covenants. See
Exhibit B, if any, attached hereto for a list of additional
Covenants. None.
12.
Miscellaneous.
(A) Notices. All
notices, requests, demands or other communication (including telecommunications)
or upon APA or Guarantor shall be in writing and shall be deemed to have been
duly given or made: (1) if to Lender, when actually received by an executive
officer of APA at APACN, 0000 Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxx, XX 00000, or
at
such other address as APA may hereafter specify to Guarantor in writing; or
(2)
if to Guarantor, the earlier of Grantor's receipt thereof or three business
days
after being deposited in the United States mail, postage prepaid and addressed
to Guarantor at the address appearing on the books and records of Lender as
that
of Guarantor.
(B) Expenses. Guarantor
agrees that, with or without notice to or demand upon Borrower or Guarantor,
Guarantor will pay or reimburse APA (to the extent reimbursement has not already
been made by Borrower) for all expenses, including reasonable fees and expenses
of its legal counsel, incurred by APA in connection with any of the Obligations
or the collection thereof and the enforcement of any provisions of this
Guaranty.
(C) Continuing
Guaranty. This Guaranty shall be and remain binding upon
Guarantor and its heirs, executors, administrators, legal representatives,
successors and assigns until termination in conformity with the paragraph hereof
designed "Termination of Guaranty." In the event of the death of any
individual person designed as a Guarantor hereunder, an amount equal to the
outstanding Obligations guaranteed hereby shall become immediately due and
payable by the estate or personal representative of the decedent Guarantor's
interest, irrespective of whether the underlying Obligations shall otherwise
be
due and payable.
(D) Assignments. APA
may assign its rights and powers under this Guaranty with all or any of the
Obligations, the payment thereof is hereby guaranteed, and, in the event of
such
assignment, the assignee of such rights and powers, to the extent of such
assignment, shall have the same rights and remedies as if originally named
herein in the place of its assignor.
(E) Waiver
of
Rights. No delay on the part of APA in exercising any rights
hereunder or failure to exercise the same shall operate as a waiver of such
rights; no notice of or demand on Guarantor shall be deemed to be a waiver
of
the obligation of Guarantor or of the right of APA to take other or further
action without notice or demand as provided herein. In any event, no
modification or waiver of the provisions hereof shall be effective unless in
writing nor shall any waiver be applicable except with respect to the specific
person to whom and in the specific instance or matter for which
given.
(F) Cumulative
Remedies. The Obligations of Guarantor hereunder are in addition
to and not in substitution for any other obligations or security interests
now
or hereafter held by APA and shall not operate as a merger of any contract
or
debt or suspend the fulfillment of, or affect the rights, remedies or powers
of
APA in respect of, any obligation or other security interest held by it for
the
fulfillment thereof. The rights and remedies provided herein and in
any other instrument are cumulative and not exclusive of any other rights or
remedies provided by law.
-5-
(G) Governing
Law;
Jurisdiction; Venue; Service of Process. This Guaranty is and
shall be deemed to be a contract entered into and made pursuant to the laws
of
the State of Minnesota, USA, and shall in all respects be governed, construed,
applied and enforced in accordance with the laws of said State, without
reference to conflict of laws principles. If APA brings any action
hereunder in any court of Minnesota or of the United States located in
Minnesota, Guarantor consents to and acknowledges personal jurisdiction over
Guarantor by such court or courts, waives any objection to the placement of
venue in such courts and agrees that service of process may be made upon
Guarantor by mailing a copy of the summons to Guarantor in the manner set forth
in the subparagraph hereof designed "Notices."
(H) Severability. If
any part of this Guaranty is contrary to, prohibited by or deemed invalid under
the applicable law or regulations of any jurisdiction, such provision shall,
as
to such jurisdiction, be inapplicable and deemed omitted to the extent so
contrary, prohibited or invalid, but the remainder hereof shall not be
invalidated thereby and shall be given full force and effect so far as possible,
and any such prohibition or invalidity in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
(I)
References
to
Lender. Each reference herein to APA shall be deemed to include
its successors and assigns.
(J) References
to
Guarantor. The term "Guarantor" as used herein shall, if this
instrument is signed by more than one party, mean the "Guarantor and each of
them" and each and every undertaking shall be their joint and several
undertaking; provided, however, that in the subparagraph hereof designed "Waiver
of Rights" the term "Guarantor" shall mean the "Guarantor or any of
them." If any party hereto shall be a partnership or limited
liability company, the agreements and obligations on the part of such party
herein contained shall remain in force and applicable notwithstanding any
changes in the individuals composing the partnership or limited liability
company, and the terms "Guarantor" and "Borrower" shall include any altered
or
successive partnerships or limited liability companies, but predecessor
partnerships or limited liability companies and their partners or members shall
not thereby be released from any obligation or liability. Each
reference to Guarantor and any pronouns referring thereto as used herein shall
be construed in the masculine, feminine, neuter, singular, or plural as the
context may require and shall be deemed to include the heirs, executors,
administrators, legal representatives, successors and assigns of Guarantor,
all
of whom shall be bound by the provisions hereof.
(K) Complete
Agreement; No Reliance by Guarantor. This Guaranty, together with
any security instruments securing this Guaranty, constitutes the entire
agreement between Guarantor and APA relating to the subject matter hereof and
supersedes all prior proposals, negotiations, agreements and understandings
relating to such subject matter. In entering into this Guaranty,
Guarantor acknowledges that it is relying on no statement, representation,
warranty, covenant or agreement of any kind made by APA or any employees or
agents of APA, except as set forth herein.
(L) Waiver
of Claims,
Defenses and Damages. Guarantor absolutely, irrevocably
and unconditionally waives any and all right to assert any defense, set-off,
counterclaim or cross-claim of any nature with respect to this Guaranty, any
agreement or instrument securing this Guaranty, any obligations of any other
person or party (including Borrower) relating hereto, in any action, suit or
proceeding APA may bring to collect any of the Obligations or to enforce any
of
Guarantor's obligations hereunder. In any litigation involving APA
and any Guarantor, the Guarantor waives any right it may have to recover any
special, exemplary, punitive or consequential damages or any damages other
than
actual damages.
-6-
(M) Waiver
of Right to Trial by Jury. Guarantor absolutely,
irrevocably and unconditionally waives any right to trail by jury in any action,
suit, counterclaim or cross-claim arising in connection with, out of. or
otherwise relating to this Guaranty, any agreement or instrument securing this
Guaranty, any collateral security or any transaction arising therefrom or
related thereto.
IN
WITNESS WHEREOF Guarantor has
executed and delivered this Guaranty as of the 28th day of June
2007.
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Witness:
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/s/
Xxxxx X. Xxxxxx
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/s/
Xxxx X. Xxxx
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Xxxx
X. Xxxx
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ACCEPTED
BY APA ENTERPRISES, INC.
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By
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/s/
Xxxxxx X. Xxxx
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Its
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Chairman
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Dated:
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6/28/07
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